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Empresas CMPC reported its fourth-quarter 2024 earnings, revealing a slight miss on earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.01, falling short of the projected $0.0214. Revenue also lagged expectations, coming in at $1.92 billion compared to the anticipated $2.03 billion. Despite these results, the stock remained stable in after-hours trading, consistent with its last close at $1,680.
Key Takeaways
- EPS and revenue missed analyst expectations.
- Stock price remained unchanged despite earnings miss.
- Strong performance in pulp production with a 23% year-over-year increase.
- Net income saw a significant drop from the previous quarter.
- Recognized for sustainability by Dow Jones Sustainability Index.
Company Performance
Empresas CMPC’s overall performance in Q4 2024 showed mixed results. While the company increased its pulp production by 23% year-over-year, sales fell to $1.9 billion, marking a decline of 3% quarter-over-quarter and 2% year-over-year. The net income of $10 million represented a sharp decrease from $147 million in the previous quarter, indicating challenges in maintaining profitability.
Financial Highlights
- Revenue: $1.92 billion, down 3% QoQ and 2% YoY
- EPS: $0.01, below forecasted $0.0214
- EBITDA: $332 million
- Net Income: $10 million, down significantly from previous quarter
- Pulp production: 1,075,000 tons, up 23% YoY
Earnings vs. Forecast
CMPC’s actual EPS of $0.01 was below the forecast of $0.0214, marking a 53% miss. Revenue also fell short by approximately 5.4%, coming in at $1.92 billion against the $2.03 billion expected. This performance contrasts with previous quarters where the company often met or exceeded market expectations.
Market Reaction
Despite the earnings miss, CMPC’s stock price remained stable in after-hours trading, aligning with its last close at $1,680. The stock’s performance suggests that investors may have anticipated the earnings results or remain confident in the company’s long-term prospects, given its stable position within its 52-week range of $1,454.63 to $2,018.68.
Outlook & Guidance
Looking ahead, Empresas CMPC has set a capital expenditure budget of $600-700 million for 2025. The company aims to maintain a softie EBITDA margin target of 15% and anticipates potential pulp price increases in February. These strategic initiatives are indicative of CMPC’s focus on sustaining growth and improving margins.
Executive Commentary
Fernando, the CFO, remarked, "We are near the floor in pulp prices," suggesting potential for future price recoveries. Francisco, the CEO, emphasized their commitment to competitive improvement, stating, "We have a strong initiative for competitive improvement." Additionally, Francisco noted efforts to enhance margins in the packaging segment.
Risks and Challenges
- Volatile pulp prices could impact future earnings.
- Weak demand in certain markets may compress margins.
- High net debt of $4.857 billion poses financial risk.
- Environmental permit delays could affect the Nadoresa project timeline.
- Economic downturns in key markets could limit growth.
Q&A
During the earnings call, analysts inquired about the progress of environmental permits for the Nadoresa project and the challenges faced in the packaging market due to a decline in the construction sector. The company confirmed its commitment to maintaining a 30% dividend policy, addressing shareholder concerns about return on investment.
Full transcript - Empresas CMPC (CMPC) Q4 2024:
Fernando Hasenberg, CFO, CMPC: Hello everyone. I’m Fernando Hasenberg, CFO of CMPC, and I would like to welcome you to our Q4 2024 Earnings Webinar. Joining me today, I have Francisco Ruestaelle, CEO of CMPC and Claudio Cabada, our Investor Relations Officer. Please note that the statements made today during the presentation and Q and A may include forward looking statements to assist you in understanding our expectation for future performance. These statements are subject to some risks and could cause actual results and events differ materially.
In the Q4 of 2024, sales amounted $1,900,000,000 EBITDA was 332,000,000 dollars and net income was $10,000,000 The pulp business generated an EBITDA of $230,000,000 with an EBITDA margin of 27.6%. EBITDA decreased by 27% quarter over quarter, primarily due to a lower average pulp price. The softest business showed an EBITDA of $104,000,000 decreasing 5% quarter over quarter with an EBITDA margin of 13.1%. These figures reflect unfavorable exchange rate fluctuation in some markets of the region and weaker macro consumption trends. Biopackaging generated an EBITDA of $19,000,000 during the period with a margin of 6.6%.
This represent a 27% decrease quarter over quarter driven by higher production cost and operation expenses. Year over year, EBITDA remained stable, reflecting a higher recovery in sales volumes offset by increased costs. In the Q4, the composition of our sales was $833,000,000 from the pulp business, dollars 797,000,000 from the softest and $288,000,000 from Via Biopakaging. Therefore, consolidated sales totaled $1,900,000,000 with a 3% decline quarter over quarter and a 2% decline year over year. Quarter over quarter, the decrease was due to a combination of lower sales in pulp and softies, partly offset by higher biopackaging sales.
For pulp, in the quarter, there were lower selling prices, which were partially offset by higher volumes. Softies faced a challenging scenario on the FX side and consumption trends, which resulted in lower sales. In the biopackaging business, revenues increased due to higher sales volumes. Compared to the Q4 of last year, revenues decreased as a result of lower sales in Softisk for the same reason behind the quarterly comparison. At the same time, pulp grew on higher volumes and biopackaging saw improvements in both volumes and prices.
Operating cost reached $1,257,000,000 reflecting a 2% increase quarter over quarter and a decrease of 10% year over year. This represents 65% of total revenues in the Q4 of 2024, which compares to 62% in the Q3 of 2024 and 71% in the Q4 of 2023. The year over year improvement is in part the result of the implementation of our competitiveness strategic pillar. Other operating expenses, account that comprises distribution costs, administration expenses and other expenses by function, amounted to $330,000,000 in the 4th quarter, increasing 3% quarter over quarter and stabled year over year. Compared to the Q4 of 2023, administrative expenses decreased in softies and increased in pulp and biopackaging.
The ratio in other operating expenses to revenues was 17.2% in the Q4 of 2024 compared to 16.1% in the Q3 of 2024 and 16.8% in the Q4 of 2023. Given the aforementioned effect on a consolidated basis, the Company’s 4th quarter EBITDA was $332,000,000 where the contribution of the Pulse segment was 65%, softest was 30% and biobackaging was 5%. Net income totaled $10,000,000 during the period, a decrease from the $147,000,000 in the previous quarter and $35,000,000 in the Q4 of 2023. The quarter over quarter decline was due to a lower EBITDA. In the year over year comparison, the decline was due to the variation of non operational figures such as deferred taxes and adjustment units.
Now I would like to turn the presentation over to Claudia, who will provide more details on our results by businesses.
Claudia, Executive, CMPC: Thank you, Fernando, and good morning, everyone. I’ll start with the pulp business. Pulp production was 1,075,000 tons, increasing 2% quarter over quarter and 23% year over year. The year over year increase reflects the entry into operations of our Bio CMPC project in Guayiba. Highwood production was 883,000 tons, up 5% quarter over quarter and 26% year over year.
The quarterly variation is explained by reduced maintenance downtime at Guayiba Mills. Saf Wood production was 192,000 tons, decreasing 9% quarter over quarter and up by 10% year over year. The quarter over quarter decline reflects downtime at Pacifico Mill, according to maintenance schedule. Regarding pulp sales volume, they increased by 10% quarter over quarter and 30% year over year, reflecting a higher dynamism in our markets. Highwood volume was driven by higher exports to China and the rest of Asia.
In the case of softwood, the increase is result of a combination of higher exports to China and the rest of Asia, partly offset by lower exports to Latin America. Pulp prices during the Q4 of the year were in average $7.49 per ton for softwood and $5.77 per ton for hardwood. This is a quarter over quarter decrease of 2% for softwood and 16% for hardwood. Compared to the Q4 of last year, prices were higher by 6% for softwood and 1% for hardwood. As a result, revenues for the pulp business totaled 6 67,000,000 decreasing 3% quarter over quarter and increasing 25% year over year.
Regarding the forestry business, sales volume was 861,000 cubic meters, down 6% quarter over quarter as a result of lower sawn timber, pulpwood and other product sales. Additionally, volumes of plywood, solocks and millwork increased. Year over year, a 5% decrease is a reflect of lower solocks, saw timber and other products, which was combined with stronger pulpwood, millwork and plywood. With this, revenues for our pulp and forestry business totaled $833,000,000 down 3% quarter over quarter and increasing 21% year over year. For hardwood, cash cost risk reached $227 per ton in the 4th Q, decreasing 6% quarter over quarter and 21% year over year.
The Q on Q decrease was driven by lower energy costs. Additionally, there were decreases in materials, labor and wood costs, while chemicals costs increased. For softwood, cash costs reached $3.58 per tonne in the 4th Q, stable from the 3rd Q24 and decreasing 9% year over year. Compared to the previous quarter, higher material costs were offset by lower wood and labor costs. Year over year, cash cost decreased across all categories with the most significant reductions in energy and wood and smaller decreases in labor, materials and chemicals.
EBITDA for the pulp business decreased 27% quarter over quarter and increased 2 15% year over year, recording $230,000,000 with an EBITDA margin of 27.6%. The quarter over quarter decline was driven by a lower sales price, while the year over year improvement is primarily driven by higher volumes and lower cash costs. And now moving to softies. During the period, the main currencies in the business experienced significant depreciation against the dollar, leading to lower sales and results for softies in comparison to previous periods. Revenues totaled 796,000,000 dollars reflecting a 6% decrease compared to the 3rd Q and a 20% decrease compared to the Q4 of 2023.
In the quarterly comparison, while volumes were stable for tissue and 2% higher for personal care, currency erosion drove revenues in U. S. Dollar terms to fall 6% 7%, respectively. In the year over year comparison, volumes were down 4% for tissue and stable for personal care. And given the currency depreciation, revenues in U.
S. Dollar terms were down 22% 18% in each case. Softy’s EBITDA for the Q4 reached $104,000,000 with a margin of 13.1 percent. EBITDA decreased 5% quarter over quarter and 32% year over year. In both cases, the variation was mainly due to currency depreciation in Chile, Brazil and Argentina, plus soft volumes year over year given challenging conditions for consumption in the markets of the region.
Now going to biopackaging business, quarter over quarter sales volumes to 3rd parties increased 4%, mainly due to higher sales in corrugated boxes and other papers, along with a recovery in corrugated papers and paper sacks. This was partially offset by lower sales of boxboard and molded pulp trays. Year over year, sales volume increased 3% driven by boxboard, molded pulp trays, corrugated boxes and other papers, offset by declines in paper sacks and corrugated paper. Revenues amounted $288,000,000 representing a 4% increase both quarter over quarter and year over year, driven by higher sales volumes despite a still challenging environment across different industries. As a result, in the 4th q24, EBITDA decreased by 27% q on q, driven by higher costs and operating expenses.
And year over year, EBITDA remained stable, reflecting a recovery in sales volumes, which was offset by increased costs. The EBITDA margin was 6.6% in the 4th Q 2024, down from the 9.4% in the 3rd Q and 6.9% recorded in the 4th Q, 2023.
Fernando Hasenberg, CFO, CMPC: Thank you very much, Claudia. Capital expenditures in the 4th quarter totaled $261,000,000 which compares with the $194,000,000 reported
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Fernando Hasenberg, CFO, CMPC: the Q3 of 2024 and $220,000,000 recorded in the Q4 of 2023. The quarter over quarter comparison is explained by higher maintenance expenses. Regarding free cash flow during the period, there was a net outflow of $109,000,000 compared to an inflow of $61,000,000 in the Q3 of 2024 and $144,000,000 outflow in the Q4 of 2023. When comparing quarter over quarter, the lower free cash flow is attributed to lower EBITDA and higher investments in the Q4 of 2024. Year over year, the increase in free cash flow is primarily explained by higher EBITDA generation and a greater reduction in working capital.
We closed the Q4 of the year with $4,857,000,000 in net debt. Gross debt was $5,600,000,000 Cash and cash equivalents, including financial investment with short term maturities, were $697,000,000 almost $700,000,000 The net debt to EBITDA ratio closed the quarter at 3.15 times, lower than the 3.3 times in the last quarter and 3.46 times in December 2023. Regarding our debt profile, the average rate is 4.79 percent and the average maturity is 5.66 years. Now I would like to share an update on the 24, 25 fire season. On January 20, in the context of a large forestry fire at Los Houses, 3 forest firefighters of 1 of our contractors, Serfonak, lost their lives while combating the flames at the fire in CMPC Forest.
We are sad and the whole CMPC team deeply regrets this loss. In terms of the impacts of fires on the company’s plantations during the current season approximately 1400 hectares have been affected compared to the 100 hectares affected in the same period last year. The average in the last 5 years for the same time period has been 1600 hectares. The company has made important effort to increase and optimize its firefighting resources and thus provide an early response to fire outbreaks. To date, the company has 140 fire brigades and more than 1,000 firefighters supported by 10 helicopters, 11 air tankers, and 3 coordination aircrafts.
Now I would like also to highlight some important events that occurred during the Q4. In November 2024, CMPC was recognized for the 2nd consecutive year as the world’s most sustainable company by the Dow Jones Sustainability Index ranking for the paper and forest product sector. This recognition is aligned with the company’s strategy 2,030, which has sustainability as a central component and with the work that has been done since 2017 on the environmental front to combat climate change. Additionally, the School of Economics and Business of the Universidad de Chile recognized Luis Felipe Gasitua, Chairman of CMPC and Francisco Ruestaglia, the company’s CEO, for their outstanding professional careers. Gasitua received a 90 year Lifetime Achievement Award for his more than 3 decades of contribution in the telecom and forest sectors, especially in sustainability initiatives.
Ruiz Taile was inducted into the FEN 2024 Circle of Honor in the Economy category, highlighting his significant contribution to the country’s development and his commitment to the community. Finally, in December, at the Board’s Directors Summit, Chile, 2024, CMPC received the Board of Director of the Year 20 24 award. On this occasion, 164 companies were evaluated. The objective of this organization was to recognize the boards that have demonstrated exemplary leadership in overcoming the challenges of implementing the Financial Market Commission Rule 461. Now I will turn the mic to Claudia for the Q and A section.
Moderator, CMPC: You are welcome to make your questions,
Claudia, Executive, CMPC: We have already the first question
Moderator, CMPC: that comes from Rafael Barcelos Bradesco. Rafael, hello.
Rafael Barcelos, Analyst, Bradesco: Hello, can you hear me?
: Yes. Yes. Well. Okay.
Rafael Barcelos, Analyst, Bradesco: So good morning and thanks for taking my questions. So my first question is related to your pulp costs. So I mean your pulp costs have fallen significantly in recent quarters, right? But the company is still not generating a reasonable level of free cash flow, right, with prices at around mid-five 100. So I just wanted to understand, I mean, how do you see your pulp costs evolve in the coming quarters?
Or if we really need to see pulp prices at the higher levels in order to see a more reasonable level of cash flow generation? Okay? That’s the first question. And then my second question is about the Natura project. I mean, could you please provide an update on how the project is evolving?
And of course, whether you will submit the board the project to the board this year, right, in 2025? Thank you.
Fernando, CFO, CMPC: Thanks, Rafael, for your question. I’m going to take the first part. Regarding our cost, as part of our strategy, we have been working significantly on improving our cost structure. That’s our competitiveness pillar of the strategy. We believe we have been very successful on that, but there’s still plenty of room to improve.
Particularly during this quarter, we had some specific events that affect our costs. For instance, we have a 45 day stoppage on the Guayiba 1 mill that is significantly longer than a regular year maintenance stoppage and that was related to the revamp of the Guayiba 1 mill. During the year, we also had some operational issues in Santa Fe, in Guayo as well that affected our overall cost performance. But we have been advancing the specific consumption on most of our main chemicals and other raw materials is improving. So we should see better results in the coming quarters.
Francisco, maybe you can
Francisco, CEO, CMPC: Well, in connection thank you, Rafael, for your question. In connection with the Nadoresa project, what I have to say, we continue advancing and I would say in a regular way. We are now in a process of getting environmental permits. We are studying and in connection and very well connection in the sense that we have been working and attending the requirements for having the normal approvals, environmental approvals and advancing without any issue. And of course, we are also in a process of preparing the engineering and all the first part of this kind of a project.
We don’t see at this moment the approval of this project in the Board of the CNPC during this year. It will be most probably mid next year.
Rafael Barcelos, Analyst, Bradesco: Okay, great. Thanks. Very clear. Just as a quick follow-up, Fernando, I mean, on the cost side. I mean, could you please be more specific on the potential for a cost reduction that you see on your pulp division?
Fernando, CFO, CMPC: Yes, it’s hard to be more specific, Rafael. We have plenty of initiatives that are underway. But no, we cannot disclose how much we can improve,
Francisco, CEO, CMPC: but there is room for improvement. I can probably add some here, Rafael. We have a very strong initiative, competitive initiative that is always analyzing the opportunities we have. And probably a couple of things that we can mention regarding your concern is that in the wood, for instance, we have the opportunity of improving the in some of the Chilean plants, the specific consumption of wood and because we had some not problem, but not we didn’t get the best specific consumption in some of the mills. So we are already solving that.
This is marginal, but it’s important. And also in energy, we because of some instability of some of the mills like Santa Fe in some part of the year or for instance in Guayua, when we had the big climate issues in last May, also we had some energy and stability. And so I’m giving you two examples where we have opportunities, for instance.
Rafael Barcelos, Analyst, Bradesco: Okay. Thank you.
Francisco, CEO, CMPC: You’re welcome.
Moderator, CMPC: Thank you. Thank you, Rafael. Now we have a question coming from Eugenia Caballendo, Morgan Stanley (NYSE:MS). Eugenia, hello.
Eugenia Caballendo, Analyst, Morgan Stanley: Hi, everyone. Can you hear me?
Fernando Hasenberg, CFO, CMPC: Yes.
Eugenia Caballendo, Analyst, Morgan Stanley: Good morning. Thank you for the call. I just wanted to check with you what are your view on the trajectory of pulp prices and how do you see market dynamics given the recent events that we had in the sector. So just trying to understand what do you see for the year on pulp prices?
Fernando, CFO, CMPC: Thanks, Eugenia. Regarding pulp prices, as it has been announced by many players, prices have increased in January about $20 in China and about $50 to $60 net in Europe as well. In softwood market is still more tight than in hardwood. So we also were able to increase prices in about $20 Going forward is still hard to tell. There is a chance that during February, we will be able to increase again prices, but there’s still a lot of discussions going on.
For the rest of the year, we expect higher prices because we believe this is we are very near the floor, especially in Harwood, but we cannot anticipate yet what’s going to happen specifically because there’s a lot of uncertainty in some market dynamics. Demand is still weak in some markets. Paper prices have not been able to adjust and margins at papermakers are still very tight in some markets.
Eugenia Caballendo, Analyst, Morgan Stanley: Thanks. Thanks a lot.
Moderator, CMPC: Thank you, Genia. The next question comes from Bank of America, Guilherme Rosito. Guilherme, good morning. Are you there?
: Yes. Good morning, everyone. Thank you for taking my questions. So my first one is on Arturosa. I’m just wondering as you guys get ready to show the project to the Board, how are you guys thinking about financing of the about financing of the project and the options on tape?
I mean, how are you evaluating doing 100% on debt or maybe raising some cash via other mechanisms? Just want to get your thoughts on that. And my second question is on Softgens. I’d like to know what kind of margins are you guys targeting for the year, just considering the competitive landscape in Brazil and the currency depreciation you’ve seen? Thank you.
Fernando, CFO, CMPC: Thanks Guillerme for the question. As Francisco mentioned, the approval of the project Natura will not happen during this year and it’s probably going to happen by the 1st semester of next year. Therefore, it’s very it’s too early to announce the financing strategy. As we have said before, what is more important is that CNPC has always had a commitment for having a strong balance sheet and that’s something we will maintain.
Francisco, CEO, CMPC: And connection with Softish, your question connected with Softish, well my answer is that we have we believe we have an important and strong position in the market in Latin America. And what it is true is that because of the devaluation of the currencies in several of our markets, of our main markets where we have more presence. Our margins were affected, especially during the last quarter of this year. But Softie has a very strong plan and I’ve been working in the domestic prices in every market where we participate. So we’re still expecting EBITDA margin in the range of 15% and up.
This is our target there. And by the way, understand we have been leaving a very competitive situation in some of the markets, for instance, like in Brazil, one of them.
: Perfect. Thank you so much.
Francisco, CEO, CMPC: You’re welcome.
Moderator, CMPC: Thank you, Guilherme. We have a next question coming from JPMorgan, Tatiana Candini. Good morning.
Tatiana Candini, Analyst, JPMorgan: Good morning. Can you hear me?
Francisco, CEO, CMPC: Yes.
Tatiana Candini, Analyst, JPMorgan: Okay. So my first question is regarding the pulp prices. So you’re mentioning a little bit and this is the dynamic that we have been seeing in the market that the spreads between hardwood and softwood have been widening and not decreasing. And we see a lot of shutdowns. So the softwood market is the challenging one.
My first question for you guys is, do you, like having any conversations or could have any plans on increasing capacity on the softwood market since we have some good prices at this moment? And my second question goes to the cost on the packaging side. So the margins in the quarter has been a little bit lower than our expectations. And we know that you have been working a lot, especially as you just mentioned in the pulp segment. So is there any space for you guys to do the same type of working that you’re doing in the pulp segment also in the packaging one?
Thank you guys for having my questions.
Francisco, CEO, CMPC: Okay, Tatiana. Thank you very much for your question. The first question, you know what, the project, the future we plan is, I mean, we plan the future of the company of course in the long term And we are not seeing too much opportunities for growing softwood. Actually, we are basically planning to keep the capacity we have. And it is true that is that market is tight today and you see an important difference between the 2 fibers.
But we’re more concentrated in the future in short fiber. And this is it has to be with our Natura project. Not seeing now any for now any increase in software. In connection with the packaging, your question, yes, we have we are doing the same strategy. We are having for pulp.
We are developing that in packaging in the sense that we have a lot of competitive contracts, internal competitive contract with different units we have in packaging like boxboard, corrugated, paper and boxes, sacraf. And so we are studying we’re actually working on improving our of course our margin there also. What is happening today in biopackaging is that we faced during the 2024 an important decrease in the market of construction market. And on that sense, it was affected the SACR especially business. And the reduction in some of the in the consumption of some of the countries where we are participating affected also the packaging.
So this is why we probably didn’t have better results in boxboard or in corrugated boxes. But answering your question, we have a very specific initiatives, of course, today working on that for improving our margin and always improving our margin because we think that we have an opportunity to be one of the best player at least in the region in those products.
Fernando, CFO, CMPC: Francisco, maybe just to complement on that and related to what Francisco mentioned about the markets, the construction market, but also the demand for boxboard. In general, in packaging in bio packaging, volumes were lower. And because of that, the dilution of some fixed costs is tougher. We have been stopping some machines, especially conversion machines in the paper sack business, but it’s not that easy and it takes longer to adjust the cost structure. But as Francisco mentioned, the competitiveness strategy also push us to improve our cost in the Biobankaging business and you will see results.
Tatiana Candini, Analyst, JPMorgan: Thank you.
Francisco, CEO, CMPC: You’re welcome. Thank you, Toutena.
Moderator, CMPC: Thanks, Tatiana. We have a next question coming from Itau Marcelo Forlan. Marcelo, good morning.
Marcelo Forlan, Analyst, Itau: Good morning, guys. Can you hear me? Can you hear me, guys? Yes, we can. Okay.
So thanks for taking my question here, guys. My first question is just a follow-up on Eugenio’s questions regarding China. So do you guys have any view regarding how are papermakers’ inventories? I know that you guys already discussed a little bit regarding papermakers’ margins. So if you could also provide more details on margins specifically for your clients in China, it would be helpful.
And my second question is related to capital allocation. So could you guys provide a little bit more color on CapEx for this year regarding growth and maintenance CapEx? In terms of growth, what would be the main avenues that you guys are expecting for this year to allocate CapEx? So these are my two questions. Thank you.
Fernando, CFO, CMPC: Thanks, Marcelo for your question. Yes, as I previously mentioned and as part of your question, you know that there is excess of capacity in China that compresses margins and of course put a lot of pressure on the pulp demand as a consequence of that. We have seen some stoppages and but it’s tough to see the discipline we will expect under these circumstances with some paper makers, especially in China. Different is the case of Europe, where we have you have the higher cost players reducing their capacity when their margins shrinks. So yes, but that’s our reality we have to live with.
Regarding your second question, can you repeat that one, please?
Marcelo Forlan, Analyst, Itau: Yes, sure. Sure. Just an update regarding the capital allocation for this year in terms of CapEx, growth CapEx and maintenance. Thank you.
Fernando, CFO, CMPC: Yes. We of course, we have our budgeting process. We approve our operational budget, but also our CapEx budget. And we are working with our CapEx for next year between $600,000,000 $700,000,000 About half of that is plantations or CapEx related to our forest asset. And we also have some maintenance CapEx there.
Marcelo Forlan, Analyst, Itau: Okay. Thank you so much, guys.
Fernando, CFO, CMPC: You’re welcome. Thanks.
Moderator, CMPC: Thanks, Marcelo. Now comes the next question with Goldman Sachs, Enrique Marquez. Enrique, are you there?
Claudia, Executive, CMPC0: Hey, guys. Can you hear me?
Francisco, CEO, CMPC: Yes.
Claudia, Executive, CMPC0: Great. So just two follow ups on the Nattoreza project. First one regarding timing. During the last call, you mentioned that you’re expected to get environmental permits by Q1 2025. Just wanted to check on how’s the timing of that?
Are you guys going to be able to get it on the Q1 or not? And then second question, a follow-up.
Rafael Barcelos, Analyst, Bradesco: I know you mentioned
Claudia, Executive, CMPC0: it’s too early to comment about the financing of the project, but I just wanted to know if there’s a possibility that you could cut dividends to
Eugenia Caballendo, Analyst, Morgan Stanley: be able to focus on the project’s CapEx.
Claudia, Executive, CMPC0: Is that a possibility? Is that something you guys are thinking about? Or no, didn’t policy will not be changed by any means because of the project? Thank you.
Francisco, CEO, CMPC: Thank you, Enrique. Well, as Hen mentioned before, we have been running in a very regular way our environmental permits. Yeah, during the Q1, the first half of the year, I would say we should be receiving the approval for the previous approval, Licencia Previa. And then we then for building the project, you need the Licencia de installation, installment permit. And we are totally under the normal timing.
So we’re not seeing any problem in this. We also created a very formal team in the state where we’re working, and specialists, the authorities, Ministerio Publico, FETPAAM authorities, the environmental authorities and the company working on all the requirements, the environmental requirements and working, I would say, without any issue, any problem in that. So this is my answer for the environmental permits. And probably you can mention some about the financing and what we are thinking.
Fernando, CFO, CMPC: Yes. Thanks, Enrique. Regarding dividend policy in the last general shareholders assembly meeting, a 30% dividend policy was approved.
Fernando Hasenberg, CFO, CMPC: Unfortunately,
Fernando, CFO, CMPC: in Chile, the law require companies to pay at least 30%. The only way to reduce that percentage is to have 100 percent of the shareholders approval, which for a company like CMPC is not possible. You will have to bring all 100% shareholders to a meeting to approve this. So that’s not something we can work as a reality or a real alternative, because so the most reasonable way to think about our futures dividend policy is maintaining this 30% we have today.
Moderator, CMPC: Thank you, Henrique. And we have another question coming from Juraj Domic, La Reindvial.
Claudia, Executive, CMPC1: Hello, good morning. Can you hear me?
Francisco, CEO, CMPC: Yes.
Claudia, Executive, CMPC1: Perfect. Good morning, everyone. Thanks for the presentation. I was wondering if you could provide us more comments on the increase on the maintenance CapEx for the quarter? I know that you mentioned some incidents at the beginning of the session, so I don’t know if it’s related to that.
And just that’s my question.
Fernando, CFO, CMPC: No, the most important one, and it was part of the Guayiba 1 revamp, that was a very significant project for us and for the future of Guayiba 1 line. It was a 14 45 days stoppage, so that increased our cost. But also we had other year maintenance during the quarter like Pacifico. So that’s mainly what explained the deviation on maintenance cost.
Francisco, CEO, CMPC: But just to clarify, the cost of the maintenance of the every program, maintenance of mills were under was very much what we budgeted. We are spending in terms of the budget, what is the we’re spending what we program for every of this maintenance period. And just to clarify, the Linea 1 in Guayiba, that was the one that took more time. It was also a program revamp of the line and so it was a program period. That line represent 20% of the total production in Guayiba.
So it’s not the most important part of our production, But it created it was harder to start with the line after this long several days of maintenance. It was harder compared with what we budgeted in that line. And it created some extra costs, but I wouldn’t say that is the most important thing in terms of maintenance for the company.
Claudia, Executive, CMPC1: Okay, perfect. Thank you. Okay. You’re
Moderator, CMPC: welcome. Thank you, Hoda. We don’t have more questions. So I think that’s all for today. Maybe anyone wants to make a question, we still have a minute.
No? Well,
Francisco, CEO, CMPC: thank you very much everybody for the meeting today.
Moderator, CMPC: Thank you. Have a good day.
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